Obama administration's shift of rural aid money angers some farmers

A record federal deficit and shifting priorities have led the Obama administration to shift some rural aid money from farmers to broadband providers, land-conservation efforts and nutrition programs, angering some in the agriculture industry. "To many farmers, the changes seem designed to satisfy organic-food devotees, first lady Michelle Obama’s anti-obesity cause, weekend duck hunters, and small-town Internet users -- everyone, that is, except traditional farmers," Alan Bjerga of Bloomberg reports. Nebraska cattle rancher and crop insurance salesman Kris Luoma said to Bjerga of Washington policy makers, "A lot of them don’t know where their food comes from."

U.S. Department of Agriculture Secretary Tom Vilsack "in July trimmed $6 billion in payments to crop insurers such as San Francisco-based Wells Fargo & Co. for the next decade," Bjerga writes. "Now he’s looking at cuts of as much as $5 billion a year from an automatic payments program that compensates farmers even if they grow nothing." Bjerga characterizes Vilsack as the "chief messenger of this makeover, a turnabout for farmers who have known him as one of their staunchest advocates." Vilsack advocates diversifying rural economies, and if  done right, government programs will benefit everyone, including crop growers and ranchers who need thriving communities nearby.

"The last real attempt to cut subsidies, in 1996, led to a backlash -- and bailout checks for farmers after export declines and heat waves persuaded lawmakers to abandon cost-cutting," according to Bjerga. Now the $1.3 trillion annual deficit will make subsidy cuts stick, said Minnesota Democratic Rep. Collin Petersen, the House Agriculture Committee chairman. "Vilsack calls the deficit an incentive to revamp farm support and allocate funds to alternative energy and broadband projects, benefiting telecommunications companies such as New York-based Verizon Communications Inc. and ethanol producers, including Poet LLC of Sioux Falls, South Dakota," Bjerga writes. (Read more)